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Commentary

How To Grow Your E-Commerce Business

How can you grow e-commerce by targeting the 25 million Hispanics online? Let's look at a case study comparing two major retailers and how they managed their "U.S. Hispanic" sites. We can learn a
lot from their successes and mistakes.

The Home Depot vs. Best Buy

The Home Depot launched its Spanish-language e-commerce site for U.S. Hispanics in
early 2009, hoping to reach a new audience and grow a new profit center. After only four months, The Home Depot shut the site down because many of its visitors came from Latin America and Spain. The
site was set up to accept credit cards only from the U.S. Nevertheless, Spanish-language consumers internationally very clearly communicated their interest in home improvement content online and
e-commerce by visiting The Home Depot's "U.S. Hispanic" site.

Since The Home Depot has 75 stores in Mexico, many Mexicans already knew the brand and easily found the site via search. They
were surely pleased that the retailer was "speaking their language" online. Unfortunately, The Home Depot's organizational structure (U.S. versus Mexican business units) clashed with the
international, borderless nature of the Internet and its "U.S. Hispanic" e-commerce venture failed.

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When Best Buy launched its U.S. Hispanic e-commerce site (in Spanish), it found the same
situation as The Home Depot had. Many visitors from outside the U.S. visited the site. In contrast, Best Buy embraced visitors from Mexico and Latin America, encouraging them to buy online with
foreign credit cards and pick up in-store when they visited the U.S. While the site generated e-commerce sales, Best Buy also heard from their store associates that many U.S. Hispanics printed out
pages from the site and visited and made purchase in-store with a better understanding about what they wanted.

Win-Win vs. Lose-Lose

How could one
retailer so completely embrace one of the greatest benefits of the Internet -- its global distribution -- and create a U.S. Hispanic and international e-commerce success story while another rejected
it?

Best Buy has created a win-win by building sales with U.S. Hispanics and Spanish-speakers internationally. The Home Depot, on the other hand, has lost not one but two
e-commerce opportunities by cutting off service online both to U.S. Hispanics and Latin Americans. Would The Home Depot consider shutting down its English-language e-commerce site as its
international traffic grows?

Consumers Always Want Lower Prices and Good Quality

In addition to e-commerce sales, any retailer with stores along
the U.S.-Mexico border knows that many Mexicans shop in the U.S. for groceries and especially high-ticket items. Why? With higher taxes and less competition, prices in Mexico are noticeably higher.

Compare prices for identical products on Dell.com vs. Dell.com.mx, for example, and you'll see why Mexicans cross the border to shop: Consumers always shop where prices are lower and the
quality is the same or better. The World Wide Web will only bring greater transparency to the shopping experience globally in the years ahead.

Chris Emme, director of sales for Yahoo en
Español, says, "I know when relatives or friends of my wife, Leticia, are visiting as boxes arrive at my apartment from the Gap, J. Crew, Disney, and Amazon. My wife's family and friends from
Argentina find that the bargains and quality of products in the U.S. far exceed the products they can buy in Argentina." Millions of other consumers shop like Leticia's family and friends.

Tips for Growing E-Commerce with U.S. Hispanics

In conclusion, ask your colleagues the following questions to grow your U.S. Hispanic e-commerce revenues:

Great article Joseph. As you mentioned 50% of all U.S. Hispanic are under 26 years of age. And with over 25 million Hispanics wired, online retailers are following under-30s Hispanic consumers to social sites like Facebook, MySpace and YouTube. “New Generational Latinos” (NGL) participate in Internet activities more than any younger generation, and this influences their online spending habits. Soome of the rules I follow to reach NGL’s and get them to take action.

Communicate Relevantly

NGL's are acculturated, outspoken, they spend, and are online. Reaching NGL's is not as much about language as cultural relevance. Online buying is developing in such a way that conventional PR and marketing strategies are quickly becoming irrelevant. Shoppers are influenced by social media and communications sites when they are looking to shop and buy. Change in influence means more speaking directly to Hispanic customers, defining new methods of influencing them and their buying habits.

Put the “P” in PR

Reaching the consumer, means the online retailer needs to start with the consumer by initiating interaction with products at promotional events coordinated with pre-selected consumers. After the customer adopts the message, it is the time to move the story into the media, to accelerate and sustain the buzz and conversation value.

Give Stuff AwayDrive action and build relationships by offering downloads, samples and freebees information, education, tips, free downloads, entertainment, coupons, loyalty programs and links to sites that support the value of your business, to encourage buying products. Dialogue Not MonologueBlogs, chat rooms and forums could be used as a support service, feedback channel or relationship-building tool. Use news releases to promote new products. Achieve Mass IntimacyTo connect one-to-one with their customers on a mass scale, online sellers have to better understand their customers. They are able to recognize and leverage their most valuable customers, as well as broaden their consumer base by introducing engaging, fun, exciting, and rewarding programs. Find FriendsIn addition to managing your message, develop partnerships with complementary Web sites. Negotiate links; assess if the situation is mutually beneficial--if the services or products complement each other. Partnerships create competitive advantages.